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The findings indicate a magnitude 7.2 quake on the Calaveras Fault -- within two kilometers of the dam -- could cause the dam to collapse, sending a wall of water 35-feet high into downtown Morgan Hill. Three hours after such a quake, the water in downtown San Jose would be eight feet deep.

As a result of the study, dam operators plan to keep the reservoir no more than 56 percent full until further analysis is completed.

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In 2009, the California Division of Safety of Dams set a restriction that the reservoir should be no more that 74 percent full because the dam's foundation contains sand and gravel that could liquefy in a big quake.

The Santa Clara County Water District has hired outside consultants to evaluate the stability of the dam, which was built in 1950, as part of the effort to better understand how it could hold up in a quake. Engineers have been using drilling machines and other heavy equipment to help determine how much the sam would "slump" in the event of a major quake.

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The results of that study should be known in two months. Fixing the dam could take as long as six years and cost up to $100 million.